Wage Budget | Contract Expiry & Renewing Contracts | Wage Structure
An important part of the financial management of your club is gaining control of player wages. To do this you should keep a close eye on your wage budget and ensure that you do not exceed it. You should also regularly review the contract expiry dates of your players and sort out each player's future in good time.
In addition, it is highly beneficial to implement a wage structure at your club. This will ensure that you only pay players what they are worth to your team.
Your wage budget and current spending on wages are shown on the Overview section of the Boardroom screen. To keep the board happy you will need to keep your spending under the budget. You can check the board's happiness with your control of wages at any point on the Confidence section of the Boardroom screen.
On the Finances section, the Salary tab displays details of the wages being paid to players with each squad status (in the minimum, average, maximum and total columns), along with the maximum wage allowed by the board for each status (in the allowed column). You can alter the maximum wage limits if you need to by using the Budget Adjustment slider on the Boardroom Overview screen. Moving this slider to the left will increase your wage budget and lower your transfer budget. Therefore, you will only be able to do this if you have a transfer budget that you do not need to use.
Alternatively, on the Board Meeting section you can ask the board to increase your wage budget. This option is in the Finance category.
Wage Budget & Transfer Policy
By having a transfer policy that focuses on signing and developing cheap young players with good potential ability and selling players on for a profit you will be able to lower your net transfer spending, and therefore increase the amount that you can afford to pay on wages. Over time, this will enable you to afford to keep players with higher and higher reputations and so increase the stature of your club.
Contract Expiry & Renewing Contracts
It is important to have a system in place where you decide on a player's future at your club at a certain point before his contract expires. For an important player who you want to keep, renewing his contract early will help secure his future with your club and ward off interest from elsewhere which could cause him to increase his contract demands or even consider his future. For a player who is surplus to your requirements, you will want to sell him before his potential value falls as his contract nears expiry.
The easiest way to check when your players' contracts are due to expire is to use the Contract view on your Squad screen and order by the Expires column.
For young developing players and younger senior squad players it is advisable to sort out their futures when they have at least two years remaining on their current contracts. Those who are not yet close to reaching their full potential and others who you want to keep should be given longer term contracts where possible.
If a player asks for a substantial increase in his wages, particularly if this is above the maximum wage limit for his squad status or breaks your wage structure, as discussed below, then it may be preferable to sell him rather than agree to his demands. However, you should still consider whether you can sign him on a lower wage using other contract terms as explained in the Contract Negotiations guide. You also have the option to ask a player to reduce his wage demands in the Transfer and Contract category of his Private Chat.
For older players who are closer to the end of their careers it is best to offer new contracts later and you should negotiate shorter term deals, possibly with one-year extension clauses included. This will help you to avoid paying high wages to a player who is no longer good enough to justify them.
Implementing a wage structure means paying each player a wage that reflects his importance to the team. You should therefore give each player a squad status that accurately reflects his importance, and then decide on an appropriate average wage for players with each squad status, taking into account your wage budget and overall financial situation. You should also consider your ambitions for your club’s future improvement and success, which may require you to spend more on wages but could also bring in the additional income to finance this extra expenditure if success is achieved.
Before you can implement your own wage structure however, you will first need to establish what sort of structure is currently in place. The Wages tab on the Finances screen summarises the amounts paid for each squad status group as discussed above. You can also see a more detailed breakdown by selecting the Contract view on your Squad screen to display basic details of each player's contract, and then ordering by the Squad Status column. This will enable you to see at a glance which players may be being paid more than they are worth to your team.
Maintaining a wage structure will require you to be disciplined and avoid signing players who demand wages in excess of the caps you put in place. Your options in the transfer market will therefore be more limited. However, again, you may be able to sign a player on lower wages than he initially demands as explained in the Contract Negotiations guide.
Benefits of a Wage Structure
A good wage structure can offer the following significant benefits:
- It will help prevent players becoming unhappy and requesting a wage rise because a teammate with the same squad status or similar ability has much higher wages. It will therefore also help prevent wages spiralling out of control as a result.
Restricting players’ wages to more affordable levels will make players easier to sell, thus helping you to make a profit from them at an appropriate point, either when or soon after they reach their peak, when you cannot meet their increased contract demands, or simply when there is a high level of interest from other clubs.
It will keep your finances healthy and controlled, ultimately enabling you to spend money elsewhere, such as on facility improvements or transfers.
Setting a Wage Structure
As discussed in the Squad Building guide, a possible composition for your senior squad might be four to five key players, six to seven first team and eleven rotation and lower. As well as making it easier to give players a sufficient number of matches during the season, having three different squad status groups set up in this way forms a good basis for implementing a wage structure based on squad statuses.
Players in your reserve squad and youth squad should only account for up to 10% of your total wage budget, after deducting any wages being paid by clubs who have loaned players. If you believe that your finances are healthy enough to use up all of the wage budget set by the board, then this leaves about 90% of your budget to be allocated to your senior squad among each of the three groups described above. The easiest way to do this is to allow each group to share approximately equal amounts, meaning that they will each account for about 30% of your total wage budget.
Therefore, if your budget is £1,000,000 and you have four key players, then the average wage paid to each key player should be £75,000 ((£1,000,000 x 30%) ÷ 4). This does not mean that you are limited to only paying a key player up to £75,000, as you could, for example, have one player on £90,000, one on £80,000, one on £70,000 and the other on £60,000.
However, it is advisable to try to set a wage cap so that you do not exceed the target average for a squad status group due to paying too much to one player. Using these figures as an example, the wage cap could be set at £90,000 for the most important key player, equivalent to 20% above the target average for the group, as long as the other key players are paid less in order to keep the average down.
Similarly, if you have seven first team players then they could be paid an average of about £43,000 each, while eleven players with squad statuses of rotation and below could be paid an average of about £27,000.
Reviewing Your Wage Structure
To stay in control of your wage structure you should review your squad at the end of each season for any players who have underperformed and not justified their squad status and wage. Such players may need to be sold on to ensure that you continue to only pay players what they are worth to the team. Also, any players who have had their place in your team taken by someone else or who have passed their natural peak and are in decline may need to be sold if you are unable to offer them lower wages with a lower squad status.
In addition, unless you manage an established top team, it will be necessary to revise your wage structure as your team progresses and improves. For example, if your team has just been promoted then you will probably need to pay higher wages in order to attract better players and compete at a higher standard. Similarly, if you are expecting to have to play more fixtures during the next season, for instance after qualifying for European competition, you might need to bring in more players to the squad and so will need to spend more on wages. As long as your club continues to perform well though, the extra income should pay for any reasonable increases in wage spending.
However, you will still need to be careful when breaking your current wage structure, especially if you are doing so in an attempt to make progress with your club rather than as a result of making progress. Firstly, you should consider whether your club’s finances are healthy and you should be confident that your club is currently on course for annual profits. The Projection tab on the Finances screen should help you establish this. It is also important to ensure that finances will continue to be strong in the future, either through success on the pitch, through making money on transfers or perhaps by moving into a bigger stadium.
When bringing in new players you should ensure that they are better than those already in your squad who are on lower wages in order to keep to the principles of a proper wage structure. You should also review the squad statuses across your squad and try to sell any players who are no longer needed.
If you have any players with a match highest earner clause in their contract then you should try to remove this before bringing in higher paid players. If this clause is activated for a player and his wage is automatically increased then you will need to decide whether he is good enough to justify the new wage or whether it would be preferable to sell him on.